Mondelez to invest $400 million in cocoa producers

NEW YORK--Mondelez International
MDLZ, -0.31%
said it will spend $400 million over the next 10 years on cocoa producers, as it focuses on securing supplies of the main raw ingredient in chocolate.

Mondelez, the maker of Oreo cookies and Cadbury chocolates, said the investment includes $100 million in Ivory Coast. The country is the supplier of more than one-third of the world's cocoa.

The company, which was created when Kraft Foods Inc.
KRFT
announced in October that it was spinning off its North American grocery business, said it will work with local governments, third-party organizations and cocoa suppliers to increase cocoa yields.

"We're investing in much more than farming, it's about empowering cocoa communities as a whole so cocoa farming villages become places where people want to live," said Bharat Puri, the company's senior vice president for global chocolate operations in a statement.

The industry expects a shortage of cocoa by 2020 if global demand continues at its current growth rate, which would drive chocolate prices for consumers higher.

Mondelez's announcement is the latest in a wave of similar steps from other big chocolate producers.

In October, M&Ms maker Mars Inc. and Hershey Co.
HSY, +0.03%
announced they were increasing their purchases of certified cocoa to secure supplies.

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